E-business of Giordano International looks good

E-business last year was particularly strong for apparel retailer Giordano International.

Overall, consolidated sales reached HK$5.4 billion, up 5.2 per cent. Group comparable-store sales and comparable-store gross profit rose  by 5.2 and 5 per cent respectively.

Consolidated gross margin edged up by 0.1 points to 59.5 per cent.

Profit after income taxes attributable to shareholders of the company was $500 million,
an increase of 15.2 per cent over 2016.

Operating profit rose by 21.3 per cent, with most regions having double-digit growth, particularly Southeast Asia, Mainland China and Taiwan. The group’s business in Vietnam was acquired on July 1.

With an improved merchandise assortment, Indonesia and Malaysia delivered good results.

Operating profit increased by 18.6 and 26 per cent for Indonesia and Malaysia respectively. In Singapore, operating profit increased by 31.2 per cent, attributable mainly to the gross margin improving by 1.7 points to 63.7 per cent.

Unusually strong sales from Thailand in 2016 resulted in an unfavourable year-on-year comparison. Operating profit declined by 20.1 per cent in local currency terms.

A surge in net profit for South Korea – a 48.5 per cent JV under an independent management team – resulted from better cost control, closure of non-performing stores and enhancement in gross margin.

Giordano had a network of 2414 stores at the end of December, of which 1268 were standalone outlets. Most stores were in Greater China, South Korea, Southeast Asia and the Middle East.

Meanwhile, the group’s e-business is directly managed and derived mainly from third-party platforms as well as its own proprietary website in Greater China. This channel generated $310 million in revenue at a 31.4 per cent growth rate.

Accounting for 93.2 per cent of the group’s e-business sales, Mainland China continued its momentum and recorded a 28.2 per cent increase in sales on various platforms combined.

Giordano’s e-business in Taiwan was revamped during the year to become its second-largest online presence.